The US spot Bitcoin ETF market is expanding rapidly due to the Federal Reserve's announcement of a rate cut. As institutions compete to buy shares of Bitcoin, $495 million flowed into ETFs in just one day, bringing the total for the week to more than $1 billion. BlackRock continues to increase its stake in its own ETF IBIT.
Demand for a Spot Bitcoin ETF
Following the Fed’s rate cut, demand for spot Bitcoin ETFs is surging every day with high trading volumes. In this high demand environment, regulated ETF products have purchased more than 17,009 BTC this week alone. This shows that institutional investors have a high level of participation in BTC ETFs.
ARK Invest’s ARKB topped the flow chart again on Friday with $203 million in funds, leading for the second consecutive day. Fidelity’s FBTC ranked second with $123 million, while BlackRock’s IBIT ranked third with $111.7 million. The three companies purchased a total of 6,661 bitcoins from the market on Friday.
Bitcoin production is in high demand
While the daily production of Bitcoin is 450, the demand for ETFs is much higher. In addition to the 17,000 Bitcoins purchased by the exchange-traded fund, MicroStrategy alone bought 7,000 Bitcoins this week.
BlackRock increases stake in IBIT
BlackRock, the world’s largest asset manager, recently entered a buying spree for Bitcoin, providing substantial support to the asset class as the firm sees Bitcoin as a long-term asset and a hedge against rising inflationary pressures.
BlackRock has increased its Global Allocation Fund’s Spot Bitcoin ETF (IBIT) holdings, according to the latest SEC filing. The company is steadily raising Bitcoin assets for its internal funds. Friday’s Global Allocation Fund portfolio filing showed that BlackRock held 198,874 shares of IBIT as of July 31, a significant increase from the 43,000 shares held in June.
BlackRock's BTC ETF has attracted more than $21.3 billion in inflows in nine months since its launch, continuing to stand out in the market. Bitcoin prices have been strong over the past week, up 5%. At press time, BTC is trading at $66,071.29, up 1.16%, with a market cap of $1.305 trillion.
This rally comes as market participants prepare for the bull run expected in the fourth quarter of 2024.
